ALEX BRUMMER: A stark warning from the Bank of England's interest rate rebel which could be disastrous to ignore

As former chief economist at the CBI, Ian McCafferty, the famously hawkish member of the interest-rate setting Monetary Policy Committee, ought to have a clearer view of what is going on in the British economy and the regions than some of his colleagues.

He remains confident that growth can be sustained in Britain for the rest of the year but has issued a stark warning that a ‘possible disaster risk’ has emerged in recent months. In particular he refers to the market turmoil of August and a ‘possible sharp disruptive slowdown in China’.

They are words which won’t be echoing around Buckingham Palace as the Chinese President Xi Jinping is given the splendour of a state banquet.

In the know: As former chief economist at the CBI, Ian McCafferty, the famously hawkish member of the interest-rate setting Monetary Policy Committee, ought to have a clearer view of what is going on in the British economy and the regions than some of his colleagues

There is no doubt that McCafferty is on to something. He notes the manufacturing sector in the UK has seen a lower rate of growth.

We are seeing some of the consequences of the Chinese slowdown and change of direction in the fast shrinking steel industry, a vital contributor to UK infrastructure.

As interesting is the takeaway from last week’s International Monetary Fund annual meeting in Lima, Peru. Anyone attending the initial round of briefings on the Fund’s latest forecasts for the global economy and financial stability could not but come away feeling slightly queasy.

The World Economic Outlook report noted ‘downside risks to the global economy appear more pronounced’ and lowered its output forecast for the world economy for the fifth year in a row to 3.1 per cent.

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The Global Financial Stability Report was full of warnings about the build-up of $3trillion or so of private sector debt in emerging markets.

It also offered caution on the shadow banking system in China and its potential impact on Hong Kong, the rotten loans in the eurozone banking system and the commodity price meltdown and its impact on growth from Brazil to Canada.

The latter has just chosen an anti-austerity Prime Minister in Liberal leader Justin Trudeau.

Indeed, so concerned were the central bankers and finance ministers when they arrived in Lima a couple of days later they went to see the IMF’s managing director Christine Lagarde and suggested that she calm the IMF rhetoric otherwise markets might run scared and the world could be driven into some kind of slowdown.

In spite of his fears for growth, McCafferty still thinks it is time to get ahead of the game by gradually raising interest rates so as not to shock the system. That must be regarded as counter intuitive given his disaster warning and the mood music from Lima.

Transfer Price

As managing director of Waitrose for the last nine roller-coaster years Mark Price has been in the enviable position of not having the quarterly worry of keeping shareholders happy. As part of the John Lewis Partnership it has been able to focus on the longer-term.

His period at the top saw Waitrose expanding its large store portfolio, underpin its upmarket image with a partnership with the Duchy of Cornwall and pioneer genuine online shopping, firstly as the preferred supplier to Ocado and latterly developing its own digital operation.

In the post-recession period the grocery market has become ever more bifurcated with upmarket grocers such as M&S and Waitrose acquiring bigger market shares along with the no-frills grocers Lidl and Aldi. This has, until recently, squeezed the middle with Tesco, Asda and Sainsbury’s suffering.

But as the consumer has become more price-conscious so Waitrose also has seen margins and profits suffer. In the not very distant past, Price clearly had ambitions to step up from deputy chairman of John Lewis to chairman but there have been no signs that his ultimate boss, Sir Charlie Mayfield, intends to step down from the partnership any time soon.

Instead it looks likely that Price will step up at Channel 4, where he also is deputy chairman, to the top job that is being vacated by former Treasury mandarin Lord Burns. That would put Price in charge as Channel 4 heads towards the public markets with a starting price tag of £1bn.

Some might see the irony of a business person who has thrived in the protected environment of a partnership leading the drive of a terrestrial television channel to the public markets. But there have been stranger transitions.

Ticking time bomb

The ubiquitous Swiss watch, one of those luxury goods beloved of the aspirant classes everywhere, is as good a bellwether of the global economic confidence as there can be. Latest data shows that demand is collapsing with a 7.9 per cent fall in sales in September.

The coldest chill comes from the Pacific with Hong Kong sales tumbling by a nasty 18.2 per cent, mainline China down 13 per cent and Singapore 14.6 per cent. Moreover, it is not just luxury brands that are suffering.

Lower priced timepieces are in less demand along with the fancy-schmancy brands that help to keep magazines such as GQ and the FT’s ‘How to Spend It’ in business. Tragic.

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ALEX BRUMMER: A stark warning from the Bank of England's interest rate rebel which could be disastrous to ignore